what is Mobile -commerce ?
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Mobile e-commerce (m-commerce) is a term that describes online sales transactions that use wireless electronic devices such as hand-held computers, mobile phones or laptops. These wireless devices interact with computer networks that have the ability to conduct online merchandise purchases. Any type of cash exchange is referred to as an e-commerce transaction. Mobile e-commerce is just one of the many subsets of electronic commerce. Mobile e-commerce may also be known as mobile commerce.
What is M-Commerce?
Attributes
Specific Attributes of Mobile Computing and M-Commerce
Mobile computing has two major characteristics that differentiate it from other forms of computing: mobility and broad reach.
Mobility
Mobile computing and m-commerce are based on the fact that users carry a mobile device anywhere they go. Mobility implies portability. Therefore, users can initiate a real-time contact with other systems from wherever they happen to be if they can connect to a wireless network.
Broad Reach
In mobile computing, people can be reached at any time. Of course, users can block certain hours or certain messages, but when users carry an open mobile device, they can be reached instantly. These two characteristics break the barriers of geography and time. They create the following five value-added attributes that the development of m-commerce: ubiquity, convenience, instant connectivity, personalization, and localization of products and services.
Fast Processing
One important characteristic of mobile commerce is that it allows the user to process a transaction fast. Not only does the customer receive his item almost instantly via download, e-mail or another form of electronic delivery, the business owner receives payment for his product or service more quickly compared to traditional methods. The customer must set up a payment option, such as a credit card or an agreement to pay using a specified account, to process the payment immediately before downloading the item. Of course, the speed of delivery is dependent on the reliability of the Internet and network services.
Reduced Business Costs
Mobile commerce also helps reduce costs for the seller. She rarely needs to pay for a separate office space, overhead costs or employees. In some cases a small business owner who sets up a mobile commerce operation doesn't need an office at all. The seller can monitor sales online or by receiving statements from a processing service. The main expense for this type of business owner is advertising to disseminate information on how users can access the product or service. The lowered cost allows the business owner to take advantage of a higher per-sale profit. He also can offer the product at a lower price compared to delivery in other formats.
Little Need for Maintenance
Another characteristic of mobile commerce is that it requires very little maintenance from the seller. The owner sets the product up for mobile delivery one time and then receives payment for sales automatically. From time to time, he may need to perform a few maintenance duties, such as correcting a technology error or updating the product, but overall it is a selling format that requires very little management compared with other selling strategies.
Mobile computing has two major characteristics that differentiate it from other forms of computing: mobility and broad reach.
Mobility
Mobile computing and m-commerce are based on the fact that users carry a mobile device anywhere they go. Mobility implies portability. Therefore, users can initiate a real-time contact with other systems from wherever they happen to be if they can connect to a wireless network.
Broad Reach
In mobile computing, people can be reached at any time. Of course, users can block certain hours or certain messages, but when users carry an open mobile device, they can be reached instantly. These two characteristics break the barriers of geography and time. They create the following five value-added attributes that the development of m-commerce: ubiquity, convenience, instant connectivity, personalization, and localization of products and services.
Fast Processing
One important characteristic of mobile commerce is that it allows the user to process a transaction fast. Not only does the customer receive his item almost instantly via download, e-mail or another form of electronic delivery, the business owner receives payment for his product or service more quickly compared to traditional methods. The customer must set up a payment option, such as a credit card or an agreement to pay using a specified account, to process the payment immediately before downloading the item. Of course, the speed of delivery is dependent on the reliability of the Internet and network services.
Reduced Business Costs
Mobile commerce also helps reduce costs for the seller. She rarely needs to pay for a separate office space, overhead costs or employees. In some cases a small business owner who sets up a mobile commerce operation doesn't need an office at all. The seller can monitor sales online or by receiving statements from a processing service. The main expense for this type of business owner is advertising to disseminate information on how users can access the product or service. The lowered cost allows the business owner to take advantage of a higher per-sale profit. He also can offer the product at a lower price compared to delivery in other formats.
Little Need for Maintenance
Another characteristic of mobile commerce is that it requires very little maintenance from the seller. The owner sets the product up for mobile delivery one time and then receives payment for sales automatically. From time to time, he may need to perform a few maintenance duties, such as correcting a technology error or updating the product, but overall it is a selling format that requires very little management compared with other selling strategies.
Drivers
Drivers of mobile computing and M-Commerce. In addition to the value-added attributes just discussed, the development of mobile computing and m-commerce is driven by the following factors.
Widespread Availability of Mobile Devices. According to Romow.com (2008), 50 percent of the world population will use mobile phones in 2008. It is estimated that within a few years, about 70 percent of cell phones will have Internet access (“smart-phones”). Thus, a potential mass market is available for conducting discovery, communication, collaboration, (e.g.,see “Global Mobile,” a special report, Computer World, May 14,2007), and m-commerce. Cell phones are spreading quickly even in developing countries.
No Need for a PC. Today’s PDAs and some cell phones have as much processing power as personal computers did just a few years ago, and possess the range of software available to PC users. This suggests that the smart phone-not the PC-may soon become the foremost tool that connects people to the Internet.
The Handset Culture. Another driver of m-commerce is the widespread use of cell phones, which is a social phenomenon, especially among the 15-to-25-year-old age group. These users will constitute a major force of online buyers once they begin to make and spend larger amounts of money. The use of SMS has been spreading like wildfire in several European and Asian countries. In the Philippines, for example SMS is a national phenomenon, especially in the youth market. As another example, Japanese send many more messages though mobile phones than do Americans, who prefer the desktop or laptop for e-mail.
Declining Prices and Increased Functionalities. The price of wireless devices is declining, and the per-minute pricing of mobile services declined by 50 percent in recent years. At the same time, functionalities are increasing. Also, a flat fee (e.g., monthly) encourages more use of mobile devices.
Improvement of Bandwidth. To properly conduct m-commerce, it is necessary to have sufficient bandwidth for transmitting text; however, bandwidth is also required for voice, video, and multimedia. The 3G (third-generation) and 3.5G technologies (described in Chapter 4) provide the necessary band width.
The Centrino Chip. A major boost to mobile computing was provided in 2003 by Intel with its Centrino chip. This chip, which became a standard feature in most laptops by 2005, includes three important capabilities: (1) a connection device to a wireless local area network; (2) low usage of electricity, enabling users to do more work on a single batter charge; and (3) a high level of security. The Centrino (Centrino 2 in 2008) is making mobile computing the common computing environment.
Availability of Internet Access in Automobiles. The number of cars equipped with high-speed Internet access (e.g., see autonetmobile.com and nvtl.com) has increased and will continue to grow.
Networks. A driving development of mobile computing is the introduction of the third- and fourth-generation wireless environments known as 3G and 4G, and the adoption of Wi-Fi as a wireless local area network (LAN), WiMax, and wide area networks.
Widespread Availability of Mobile Devices. According to Romow.com (2008), 50 percent of the world population will use mobile phones in 2008. It is estimated that within a few years, about 70 percent of cell phones will have Internet access (“smart-phones”). Thus, a potential mass market is available for conducting discovery, communication, collaboration, (e.g.,see “Global Mobile,” a special report, Computer World, May 14,2007), and m-commerce. Cell phones are spreading quickly even in developing countries.
No Need for a PC. Today’s PDAs and some cell phones have as much processing power as personal computers did just a few years ago, and possess the range of software available to PC users. This suggests that the smart phone-not the PC-may soon become the foremost tool that connects people to the Internet.
The Handset Culture. Another driver of m-commerce is the widespread use of cell phones, which is a social phenomenon, especially among the 15-to-25-year-old age group. These users will constitute a major force of online buyers once they begin to make and spend larger amounts of money. The use of SMS has been spreading like wildfire in several European and Asian countries. In the Philippines, for example SMS is a national phenomenon, especially in the youth market. As another example, Japanese send many more messages though mobile phones than do Americans, who prefer the desktop or laptop for e-mail.
Declining Prices and Increased Functionalities. The price of wireless devices is declining, and the per-minute pricing of mobile services declined by 50 percent in recent years. At the same time, functionalities are increasing. Also, a flat fee (e.g., monthly) encourages more use of mobile devices.
Improvement of Bandwidth. To properly conduct m-commerce, it is necessary to have sufficient bandwidth for transmitting text; however, bandwidth is also required for voice, video, and multimedia. The 3G (third-generation) and 3.5G technologies (described in Chapter 4) provide the necessary band width.
The Centrino Chip. A major boost to mobile computing was provided in 2003 by Intel with its Centrino chip. This chip, which became a standard feature in most laptops by 2005, includes three important capabilities: (1) a connection device to a wireless local area network; (2) low usage of electricity, enabling users to do more work on a single batter charge; and (3) a high level of security. The Centrino (Centrino 2 in 2008) is making mobile computing the common computing environment.
Availability of Internet Access in Automobiles. The number of cars equipped with high-speed Internet access (e.g., see autonetmobile.com and nvtl.com) has increased and will continue to grow.
Networks. A driving development of mobile computing is the introduction of the third- and fourth-generation wireless environments known as 3G and 4G, and the adoption of Wi-Fi as a wireless local area network (LAN), WiMax, and wide area networks.
Advantages of M-commerce
For your business:
For your consumers:
- Since consumers have access to their phones while on the move, retailers have a chance to attract their attention—anywhere, at anytime. The very term “mobile” means something that can be moved freely and easily. It therefore follows that with mobile phones, impulse buying becomes possible for the consumer 24/7. Before the use of cell phones, impulse buying only occurred when the consumer was physically surrounded with merchandise.
- A phone in the consumer’s pocket now provides access to any and all online retailers, available at all hours.
- According to IBM Online Retail Index, “Mobile Ecommerce” saw 11% more growth than “all ecommerce,” and a 27.4% higher increase than “in store retail sales” in the first quarter of 2013.
For your consumers:
- Prior to the use of m-commerce, if a consumer were interested in purchasing an item, they would have to continually remind themselves to visit the physical store in order to purchase it. Now, with m-commerce, consumers are able to look at product specifications and prices within seconds and have the ability to purchase just as quickly.
- Consumers are now, more than ever, using their mobile phones while in stores to check competitor’s prices and product reviews. Consumers also frequently use mobile coupons for specific products.
- According to Merchant Warehouse, 73% of consumers have used their mobile phones while in stores, 38% of smartphone users have bought something on their phones and 21% of consumers search for coupons on their mobile phones.
What factors do you need to consider when designing a mobile site?
1. Keep it simple
Amazon’s m-commerce applications are so successful because they’re clean, simple, and recognizable. By creating a mobile site that is similar to its main website, users are able to easily identify that it belongs to Amazon, and can quickly adapt to the mobile settings. This makes users feel more comfortable, and makes them more inclined to buy. Additionally, simplicity ensures that your site will run faster, meaning that your consumers are more likely to stay longer and make a purchase.
2. Designing for a Smaller Screen Size
When designing for mobile device screens, you must take into consideration the smaller size of the screen. While we are used to designing for the HD monitors with graphics at 1920×1200, the new iPhones and some of the Android and Blackberry phones have a drastically smaller screen even as small as 320×240. Keep this in mind when you begin your design.
3. Think locally
According to Google, the majority of mobile searches are centered on finding local retailers and businesses. Registering your mobile site with Google Places, setting up local Yelp profiles, etc. will ensure that you get top billing on local searches. If you have multiple locations in a relatively small area, make it easy for your consumers to find the nearest site, by including a simple store locator at the top of your mobile site.
4. Encourage return shoppers
Don’t make your clients enter their information each time they want to make a purchase. Doing so on a mobile device is highly frustrating. By securely saving payment and shipping details, shoppers can make a purchase in one simple click, encouraging them to continue utilizing your m-commerce platform. You may also consider saving your consumer’s purchasing history so that it’s simple for them to re-buy the product when they’re out.
5. Predictive Search
Predictive search helps m-commerce customers to find what they’re looking for faster, as they may be unsure of a product’s specific name or spelling, leading to user frustration. Additionally, the predictive search options may lead a buyer to a product he or she would have never considered purchasing otherwise. It’s a win for everyone.
M-commerce is the future of online sales, it’s inevitable, and thus retailers have the ability to greatly increase their business. Understanding and implementing the factors above will help put you in the best position to leverage the advantages of m-commerce in your market.